The U.S. Dollar has opened the week on a bullish note, continuing the theme that began to show in the week prior after the European Central Bank extended their QE program. Much of last week saw price action in the Greenback grinding around higher-low support. That area of support was again tested on Friday after Non-Farm Payrolls came-in below expectations. But, as we’d seen throughout the week, buyers stepped-in around 94.40-94.50; keeping the door open to an extension of USD-strength as we move deeper into Q4.

U.S. Dollar via ‘DXY’ Daily: Strength Holds After ECB-Fueled Bullish Breakout

Chart prepared by James Stanley

At this point, we’re near the three-month highs in the Dollar shortly after a Monday open. This isn’t usually the best time to try to chase new trends. Instead, traders can let price action in the U.S. Dollar develop further before assigning any directional prognostications for longer-term strategies. As we discussed last week, the Dollar could potentially move-lower while still retaining this bullish stance. On the chart below, we’re looking at a bullish trend-line that’s showed up in DXY since the September low came into play, and we’ve drawn a blue box around the prior zone of resistance that, at this point, has not yet been tested as support. Bulls have simply been unwilling to let prices trickle back down into this zone as of yet, as that higher-low support has showed about .10 above the top-end of the prior resistance zone.

DXY Four-Hour: Bulls Get Shy at 95.00; Support Shows Above Prior Resistance Zone

Chart prepared by James Stanley

What this means: We may see a slightly deeper retracement in DXY, breaking through last week’s support at 94.40, while bullish positions remain as attractive. Traders looking to work with that theme can investigate stop-losses below the prior swing low, around 93.48, in the effort of trading top-side bullish continuation.